- The Washington Times - Wednesday, September 12, 2007

The European Union is taking aim at Sweden’s state-owned gambling monopoly, arguing that it violates rules promoting competition among its 27-member nations.

Sweden says the monopoly is needed to protect the public from “addiction,” illegal rackets and fraud. But EU regulators don’t buy the argument.

Instead, regulators ask: Why is the monopoly run like a private company with a $53 million annual budget, which mainly promotes lotteries and horse races?

“I can think of 700 million reasons why they don’t want to abolish it,” said Christofer Fjellner, a Swedish member of the European Parliament.

“There is a double standard behind the way this monopoly works. It’s impossible to say that the monopoly exists in order to prevent addiction and illegal gambling, while at the same time having such aggressive marketing.”

This is in contrast with two other prominent Swedish government monopolies, liquor and pharmaceuticals, said Jorgen Hettne, director of Swedish Institute for European Policy Studies (SIEPS). “The gaming industry is allowed to do almost anything they want whereas the other two monopolies have stricter rules to follow.”

Sweden delayed joining the European Union until 1995, citing its policy of neutrality as the European bloc developed during the Cold War.

But now that it is in, the country is anything but neutral in battles with EU bureaucrats in Brussels and their regulations that set standards on mundane issues ranging from the size of strawberries to the latest dispute over gambling.

Svenska Spel, which runs the gambling monopoly, has an annual profit of almost $700 million.

Some of the profits are used to sponsor the Swedish Sports Confederation, but a significant chunk — about $491 million — goes to the government and, as the argument goes, to the Swedish people.

“It doesn’t look like the [European] Commission will accept Sweden’s answer, that it is to protect public health,” said Anna Hedh, another Swedish member of the European Parliament. “The commission is part right in their claim that the monopoly is there to boost government economy, but a lot of the money is used to do good such as treatment for gambling addiction and sport sponsorship.”

Sweden is not the only country arguing with the European Union over state-owned monopolies.

France, Denmark, Greece, Austria, Hungary, Portugal and Italy have similar monopolies for gambling. Italy was forced to open its gambling market after a ruling from the EU court in March 2007.

“It won’t look good on our record if we lose in court, and it might give the commission an incentive to go after the other two monopolies,” Mrs. Hedh said.

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